HTC and Beats By Dre may have been tight for a few years, but the floundering OEM is ostensibly holding back the up-and-coming accessory manufacturer, and Jimmy Iovine and team is looking to buy back HTC’s remaining 25% stake.
According to the Wall Street Journal, HTC’s poor performance has been a hindrance on the brand’s growth, as it hasn’t been able to put up the capital it once could for expanding into new markets. Beats has been looking to move into the car stereo business, and is soon launching a streaming music service that focuses on curated playlists.
HTC once owned 50.1% of Beats, but recently sold a 25% chunk for $150 million as it continued to close in on red ink. Now, the Taiwanese manufacturer is rumoured to be in dire straits, while Beats has grown to capture nearly 60% of the “premium” headphone space since 2008.
Though the Beats branding has reportedly helped HTC differentiate its devices, it is no longer the sales catalyst it once was, and many enthusiasts view the smartphone integration as a gimmick. Beats’ hardware, from earbuds to speakers to its hugely popular over-the-ear headphones, have become commonplace in North American culture, seen on the ears of rappers to school kids, but HTC’s cache has fallen equally quickly. The once-king of Android now sits below Sony and LG in market share, and has failed to grow its business for nearly 18 months.